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When The Buyer Takes It On The Chin

Today, I read a post by Jean-Paul Peron asking what one should do when faced with a showing by an agent who is located over 2.5 hours away from the subject property. That's a common occurrence in my marketplace also, and I'm confident many other listing agents have experienced that. When buyers are not standing in line with numbers, like at the deli, to buy homes, an agent usually takes whatever is handed to them. For many, the money trumps ethical behavior today.

The only person taking it on the chin with this scenario is the buyer. The chances of the buyer being represented properly by an agent who has to pack a lunch to show a property is nil. As a matter of fact, in my opinion, that buyer is not going to be represented at all. From what I have experienced with our listings, the buyers' agent puts that buyer in a chokehold and the pressure is on to write an offer, if that property is anywhere near being acceptable. The seller and the listing agent are the only ones benefiting. The buyers' agent will exert whatever effort is needed to close the buyer so that the long journey will not have been for nothing.

As listing agents, my team and I love to hear that a showing will be taking place by an agent from outside of our area. The likelihood of receiving an offer is in direct proportion to the distance the agent has to travel. The further the distance the better the chance of an offer being submitted. We've experienced this with our listings. We have no problem with finishing the entire deal once the offer is presented. The buyers' agent never has to do another thing with our listings including going to the closing. We will gladly make sure they get paid.

The fault lies with the buyer for not using common sense and selecting an agent who is within the area of the listed property. The buyer can ask to be referred. The buyer can go online and find a top agent in that particular area. Unless common sense is used by the buyer, that buyer will be paying for the sins of his agent, and the buyer will never realize what happened to him!!!

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Posted by Barbara Todaro "Franklin MA Homes" on 03/13/2010 11:03 AM

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Originally posted at: "#1 Team in Franklin's #1 Office": When The Buyer Takes It On The Chin

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85 Comments on When The Buyer Takes It On The Chin

MAR

2010

Barbara...any buyer is a good buyer, but any agent in a storm is not the way to choose your (buyer) representation...that is for sure.

Steve....this scenario happens alot.....my team members have experienced this with our listings....we do the deal with no problem and never see that agent again....it's a one shot deal for them.

Probably this agent is a friend of the buyer, otherwise why would they choose them. I have bought out of the area with a friend of mine, because they wanted me to have the business, but would never do it for a stranger.

Jane.....sometimes they are friends, but more often than not, the buyers' agent is just there for one showing and to put the deal together.....it happens all the time.....we see it often with new construction.....one showing and the buyers' agent is gone.

Barbara,

I put ditto marks under your post as I totally agree. I have referred business to the best agent in the next county just because that agent will do a better job for my friend or past client who is being referred.

Mary.....not all agents are as professional as you.....some roll the dice to get that commission.....

Sad, but true.

MAR

2010

Barbara, inevitably, this is true. And the poor buyer receives the short end of the stick. Because many don't understand fully how we work, I wonder if they even get that?

The only time I've seen an exception to this is in the luxury home market such as we have here in Miami. Some agents cover the span of 4 counties on the coastline and do travel to all the required appointments and represent their buyer as required.

Barbara,

As home inspectors we too are placed in a bad situation when the agent has had to travel for a long distance to do the deal. Suddenly, we are put on the spot as the bad guys if we find anything that might risk the deal. I will not do anything unethical to save a deal for an agent just because they had to drive a long ways to get to the showing. If something goes wrong with the home after the deal closes I am the one that is on the line.

Barbara, in my opinion, the liability that comes with working out of your territory is too great. Help a customer find an agent who knows the area.

Maggie....I can understand someone traveling if they are knowledgeable about the area, the builder and all the necessary information that the buyer needs to make the proper decision....even if it's a luxury home, they need to know the area and the players.

Chuck.....I wouldn't think you would do anything unethical for anyone.....certainly not an agent you'll never see again....I'm sure the pressure is on you by the selling agent to not kill the deal.

Marlene....the liability is much too great.....it's not worth any amount of commission....

GOOD MORNING BARBARA! Congratulations on the well-deserved feature! Like Marlene said, the liability is too great - for me personally - I refer out not just with areas - but also commercial, land, etc., things that are not my "areas" of knowledge. It's just best to give Buyers the best representation possible! Congrats again - I learn much from your posts! -- Gabrielle

Gabrielle....My team members and I also refer everything that is not residential....we do not have any expertise in commercial or industrial.....residential and land listings only.....and I thank you or your kind words.....that's a tremendous compliment from you and I appreciate it.

Barbara, I don't mind a drive, but definitely not to sell a house to somebody I don't know. I have had family members ask me to give an opinion on their purchase but even then I would not know about neighborhoods, schools, all the things that go in to making a house purchase a comfortable home purchase. Well deserving of the feature.

Barbara--This is an excellent post. The situation sometimes applies to attorney representation, as well. I have no problem working with a Buyer in your market area. How much help can I really give a Buyer in Hamden County, where I rarely frequent and do not know the terrain.

I would enjoy having a cup of coffer with you one day this spring. We seem to be cut from the same cloth.

Ed....I agree....and thank you for commenting.....I enjoy reading your thoughts.

Elliott.....I never think of that from an attorney's perspective.....I have attorney friends in Franklin who will represent anyone....anywhere in Massachusetts!!! You're to be congratulated for having that mentality.....send me some business cards, Elliott.

It could be greed. But what if the agent is from the area and is familiar already? I learned the business in Rochester. However, after I met my wife I relocated back to Westchester County, where I am from. Because I was "new" for a while, some treated me like an interloper. One in particular was not a native of the area; I was-ironic, no? Of course, at that point I already lived here. We do business in Queens, not 2 1/2 hours away but not in our backyard. However, my wife knows the area like the back of her hand, and as a partner in the firm she's qualified to advise.

I think we should try not to pre-judge the long distance drivers until we are certain they are making the drive out of self interest only. If they grew up there or have prior familiarity they may not be doing the client a disservice at all.

I would do it for a friend, or a client with whom I've done LOTS of business with. But otherwise, the referral is the way to go!

Barbara -- I wish you were around here -- I'd love to do a deal with you. And, no -- I"m not driving to Franklin Mass to do one!

Barbara,

While not quite that far, I have represented a few buyers in distant transactions. One was my brother; he had lived in that area and knew it well. Part of an MLS to which I don't belong, I "hired" a local agent to help with comps. I do not lean upon the listing agent to do my job - I trek to inspections and the like. With another, it was an area in which I used to live.

What I don't care for is each listing agent hustling me to refer my buyer to him or her!

Barbara,

When the same Buyer goes to list their house, they often times go to the agent who did all the work once they have seen the process.

If the agent is that far away, it would serve everyone better to just refer it to a good Buyer's Agent.

Marianne

The buyer may have been misled by his agent but my experience is more often that their agent does not have enough knowledge about the area my listing is in to give the buyer enough valuable assistance to get them to write an offer. I work for my seller so when I see an agent from even 45 minutes away has shown my listing I call them after the showing and offer to answer any questions the buyer may have had. Did the byer realize how close the home is to walking trails or a bus line? Did the buyer realize how quickly homes in this neighborhood sell due to its popularity? Etc. The agent is grateful that you have pulled them out of a sling and guess who gets the referral the next time that out of area agent gets a client they now know they cannot effectively represent?

J Philip.....there are always exceptions and if one knows the area, drive away.....but the individuals who do not know the area and make it obvious that they don't, should refer the buyer to a buyers' agent who is familiar.....it's evident when they only appear once.....they send the buyer alone and directly to the listing agent for all future showings and inspections....I'm not placing judgment on anyone.

Richard....thank you for your comments.....we're not that far away!!!

Irene.....for the listing agent to ask for the referral is not acceptable either.....my team members and I feel that the cleanest deal is when there's a buyers' agent involved.....we are fully prepared and prefer to co-broke all of our inventory.....we have many listings in many price ranges with many concepts.

Marianne....you're right and we've experienced that many times....the distant agent brings the buyer for one showing and writes the offer and then disappears....as I've stated, we don't mind....we finish the deal in a very professional manner....and we ALWAYS get the listing next time around.

Sarah.....you're right....when we follow up, the same procedure is done by my team members to help that agent close the buyer.....we too represent sellers and whatever is necessary to not miss a beat is what we do.

I ALWAYS make referrals for areas outside of my knowledge base. Whether it's commercial, or a residential deal outside of my geographic comfort zone. Not only can I not be a helpful resource in those situations, I do not like the internal pressure that I feel to "hurry up & get it over with"!

Jenna.....and that's the right way to do it......thanks for stopping by and commenting.

Most of the time...I would agree with you Barbara....and then...there are times when agents have moved from, used to live in, have summer/lake homes at...are frequent visitors to....areas outside their "usual" market....and they do know the market.

Congratulations on your featured post. It's nice to see your smiling face when I get into Active Rain.

Sally & David....if they know the marketplace, they should represent that buyer, if they don't mind the trip....if they do not know where they are going, it's not fair to the buyer.

thanks, Katie.....I was surprised to see it myself.

The interesting thing about his scenerio? Those buyers will not use the way out of town agent when they are selling their home. I keep in touch with the folks and have received the listing back a few short years later - as the home is not always their dream home after all....

Janet....you're right.....we've experienced that also....the one who does the work gets the listing.

Fortunately in Oklahoma that is not a problem. I have a listing 30 miles away and I can get there in 25 minutes due to out lack of density and great road system. However, if a buyer wants to see it, I have been working with an agent 5 minutes away from my listing. Even though she is with a different company she is outstanding with buyers, and I believe time is of the essence anywhere in real estate. My job is to represent my seller well, and this works for me and the seller.

Joe....that's a great system that you have in place.....whatever works best for your seller is the best system.

This is a really interesting point. Everything in Southern Maryland is as much as an hour away so an hour drive is what I plan for most days. Just plug in Howard Brinton and go for the Southern Maryland ride!

Cheryl....95% of our business is in Franklin....on occasion we have a listing in an abutting town.....we usually don't have to leave Frankin....I like it that way.....we are totally focussed on our town and know MOST of what we SHOULD know....

I am a new agent and cover an area within a half hour radius of my office. I met an agent in the gym the other day and asked her her territory and she said 'Vermont'. I lost respect for her right away. How can anyone cover such a large territory and consider themselves an agent/fiduciary?

Mark....when agents need the money and their personal interests are first and foremost, the state is their marketplace.....it's not the right thing to do....that's what referral fees are for.

Barbara, Congrats on being featured! I too wonder what the buyer is thinking when using an agent from 50 or more miles away....I will not show property as an agent outside of my market. I don't feel like I can do a good job and I do not want the liability. Have a Great Week!

Barbara - congratulations on the feature. I read everyones comments and learned a lot, something i had not put much thought into, thank you for the learning lesson.

John.....I'm with you on that.....enjoy what's left of it.....

Christine....I have to say, I have learned sooo much from reading your posts.....I don't always leave comments, usually because I'm not that knowledgeable about the topic.....but I certainly read what you have to say and have learned from you.

Hi Barbara -- Wow, 2.5 hours. That's sad. I have never seen anything like it. I have seen 45 minutes, all within our major metro area, but not in a completely separate area.

Chris.....when tough times are with us, people do some outrageous things to make a buck!!!

I met a women in my office who was there to see an attorney in the same building. It was Monday and she was just back from a trip to the coast where she had been watching property, going to open houses and wanting a second home. The listing agent on the home she wanted insisted that she could represent boht the seller and the buyer and the buyer saw that as a red flag. She asked me a couple of simple questions and we hit it off.

I wrote the offer and negotiated it or her. We did an inspection and while there I went with her to several other on market properties and indeed, she was finding a good value compared to listing prices. There were so few solds in the area that I had no idea what the appraiser would use for comps. When the appraisal came in $85K low, we were both shocked but left it up to the seller to decide what he wanted to do. He actually called our lender and demanded a copy of the appraisal and my fine lender eventually convinced him that that was the value of property on the coast then. Reluctantly the seller came down 75K and the buyer went up 10K. She got the property for more than $125K under the list price.

Do you think for a minute that the listing agent could have arrived at that end? I doubt it. There is no blanket statement for what distance a Realtor should travel to help a client. One shoe doesn't fit all. A good Realtor will pack a brown bag if necessary and take the steps necessary to help his buyer gain an objective.

BTW, that area is also in our multiple, so I had access to all necessary data.

On the other hand, Barb, I have had people to list their property in an area too far for me to service and I have declined. Some things just won't work. Good post, you got me thinking.

Glenn.....the listing agent could not have arrived at that end.....you did your due diligence...you represented the buyer properly....the listing agent represents the seller and could never do a better job with the buyer than you did....but that was in your marketplace....you were not hiking over 2 hours to a show a property.....

as far as the distant listing, I would have referred that because of the distance and the lack of knowledge about the area.

What about agent with two different state license, we have agents here that show homes in Florida and Alabama since we are less than 30 minutes from each other. Each state has different laws as well.

No Barbara, it is a 2.5 hour drive from here to the coast. Further than it looks on the map. Thefact that she had decided on the house was the key. I would not have gone and tried to help her find a good value, she had already done that leg work and I just happened to be in the right place at the right time. Our multiple takes in all of western Washington and then some.

She owns a house and two large investment properties here in Seattle and I look forward to doing more business with her in the future.

Charles....as long as the agent is familiar with the marketplace and can represent the buyer properly from start to finish, it's a go!!! it's when the agent is lost getting to the property and knows nothing about the area, it's not representing the buyer properly.

Glenn.....I now understand.....if she had already decided on the property, you just struck gold.

I had an out-of-area agent who made a transaction sooooo much more difficult by insisting the 'way they do it' is the 'right' way and the way I was doing everything was wrong, plus asking a multitude of questions she wouldn't have had to ask if she had been familiar with our market. I was glad when I was done with her and thought I'd never see her name again. But the next week - a listing pops up in my very own neighborhood with her name on it. WHADDUP?!? I can't figure people out.

Joetta....if she sold your listing out of her area but in yours, my money is on a guess that she sent just sold postcards to everyone in that area and picked up a freebee.....I'm tellin' ya, that's what happened!!!!

I've seen it go both ways. There are several Atlanta agents who own second homes on Lake Sinclair and keep up with our market, those agents do travel down here on weekends and could very well represent a buyer. Others have a friend who mentions they want a lake house and come down and expect another agent to pull listings/comps and do it for free. Those buyers, I agree, are getting the shaft.

Tammy.....I agree with you....if they are familiar with the area, that's one scenario that works....the other doesn't.....thanks for stopping by.

The buyer should use the listing agent, duh! LOL! I'm in the same boat, Barbara, more often than previously in my experience, because more buyers are starting their own search online themselves. The best is when they want you to show them the property, then out of nowhere appears their realtor in shining armor when its time to write and offer!

Keith....that happens all the time....that doesn't bother us.....we're set up to co-broke.....it's when the buyers' agent comes from nebraska to show one house once and then leaves the signed offer in our hands with the rest of the deal.....we do it with a smile.....the buyer is getting the short end....we represent the seller....not the buyer.

This happens all the time here. In many cases the listing agent ends up doing more than twice the work, to compensate for the buyer's agent's lack of knowledge.

In one case, the buyer's agent got lost and did not show up at the 1st showing at all (I'm lost, why don't you show it???). For that 2nd showing, she was almost an hour late. The buyers called me repeatedly throughout the transaction and the only reason we closed was because I helped the buyers understand our area, what septic systems are (buyer's agent is from the city), etc. And the buyer's agent showed up at closing, 30 minutes late, toting coffee and donuts with her... and taking her 50% of the commission. I was so pissed. BUT I SOLD THE HOUSE.

Case 2 I did the same thing as in case 1. But 2 years later, buyers go to sell and who do they call??? ME! So it all works out sometimes in the end.

As long as the buyer'a agent does his part of the job, opens the home of the inspections, does the walk through, reshows the home for the buyer when asked to, picks up his/her own signs and lockboxes, I could not care less who sells the home. And woe be the agent that tries to convince the buyer to stop using the distant agent. We might not like it, but the quickest way to get slapped with an ethics violation is to interfere with the relationship between the buyer and his agent. There may be reasons the buyer wants to use that agent over someone nearer to the home that he knows nothing about.

As listing agent my job is to represent the seller as a single agent. A long distance agent is free to show my listings and is the one at risk if he/she makes an error in his work.

However, the buyers agent will not find that I want to do his job for him. If he/she cannot do his/her job properly, then it is his/her job to tell the buyer why.

I think sometimes these long distance agents start working with a buyer, who expands their area of looking or who changes their mind and decides to buy farther away. At some point the agent should decide to refer out--but many who have already "invested" time in the person may not want to "give up" their 100% of the commission.

I always offer to take a referral from out of town agents and many indicate they have so much time in this buyer they want to see it all thru.

Erica.....exactly.....it works out in the end....and in both cases you sold the listing for the seller....plus you got a bonus listing....good for you....you did your job and did it well and that's the important part.

John....I agree with most of what you stated...no one should interfere with that relationship and my team members and I do not do that....what I am saying is that it is not in the buyers best interest to use someone who does nothing but one trip to the property and knows nothing about the area....what I disagree with is that once the deal comes together and the buyers' agent disappears, we finish the deal.....we do not rely on the buyers' agent to do what that agent should be doing.....it doesn't usually work that way....this type of agent just disappears and if found, the answer to the question of "will you be there" is always NO....so we take over and finish the deal.

Erica....We also see that happening at times.....I can understand it.....as long as the deal closes and no one drops the ball.

I am licensed in New york State not in my "area". If a buyer's agent does their job, investigating, probing, learning online, studying the comps a buyer may be better off using an "experienced agent" who knows about houses, how to negotiate, how to put the deal together whereever they come from. The assumption that an agent is out of area is realy silly when admittedly you don't the agent which means that you don't know what areas they know and what areas they don't know but judge them simply because you "consider them out of area". Is a buyer better off using a brand new agent that isn't Out of area but is totally inexperienced?

I often sell out of area but do my homework and yes it is quite a bit of work....previewinging properties, going to the towns, villages etc for information reading the local newspapers online and generally searching out any necessary information. Just because someone lives in an area does not mean that they are up to date on what is going on in that area not does it mean that a local agent, 40 years in the business, has taken the Buyer's Agency course>>>

A good agent is a good agent.

Miriam.....yes, a good agent is a good agent....I think what we are talking about here is an agent who does a one stop, one showing on a property....writes it up and falls off the face of the earth....dumps everything else from that point forth on the listing agent.....this has nothing to do with experience....if the agent does not know how to get to the property, much less know anything about the town, it's not exactly representing that buyer properly.....we are listing agents.....it doesn't matter to us....the seller will be represented properly whether that buyer has an agent or not...and that's all my team and I care about....we're sellers' agents.

Hi Barbara, I like this post and the topic for sure. I often shake my head and wonder why any Realtor (other than for the money) would go way out of their way geographically to show a house. It really bugs me. Yes, the buyer is the one that take it on the chin, so to speak. The Realtor is doing a disservice because they don't know the area, or the neighborhood and therefore will fall short in knowledge about the property.

Patricia

Hi Patricia.....those are my thoughts also.....it's all about the money....not for the benefit of the buyer.

I dont appreciate agents who work in this manner....they are not good for the buyer or the market.

Barbara, I see it more and more with the IDX sharing. I also see it when it is a relative. I have a certain distance I will go and that means I know the area, and not just a house.

Barbara as always a great post. As you know I am new to the business and for that reason I do not even consider going out of area. My limited time in the business has shown me in general it is best to work where you have knowledge.

Barbara - the type of agent you are referring to is not necessarily from afar he/she could work in your own office. It's not the distance you are talking about but the type of agent. Perhaps you see it more often from afar or perhaps you just notice it more because they are from afar.

MAR

2010

Our market knowledge only stretches so far. Unless an agent is willing to spend hours and hours focusing on that market and understanding it just for that one client, it is better to refer out. But again not just to anyone, but to a Realtor who knows the terrain as well as the business that you can feel good about sending your buyer to.

Damon....I agree with that....

Missy....knowing the area is very important.....

Tom......that's your best bet....

Kathy.....you could be right......but local agents wouldn't ask the co-broke to do the work....that doesn't happen....we would never get the phone call that they are not going to be there for a showing or inspection or whatever.

Wendy....I agree with you.

Kathy, There are local agents who have day time jobs and cannot come for inspections or closings. when I have a listing and the buyer's agent has another job I have to do things they would normally do.

I find that the agent who travels far from their office location often has gotten an IDX lead off their office's website. Just a part of selling real estate today, it use to bother me, now it is just part of business.

Gita....usually in those situations, the part time agent has a partner or someone to rely on to finish the deal or do the work that's required when the agent is at another job.

Mary....we don't care either.....we just want the house to sell and we know we'll get the listing next time around.

Unless you are showing rural and ranch properties like we do and 2.5 hour drive is not uncommon. We do a buyer prequalify before driving that far even if they tell us it's cash, we get a letter from the bank.

Donnie.....my team members don't like to leave the town, forget about driving that distance.....and actually, we can do a great business right here in Franklin, Ma without ever leaving the town.

This is exactly why I've stopped taking clients who are looking on "the other side of town" from me. It pays to specialize, and my specialty is my own backyard. It is a rare occasion, indeed, for me to take a buyer or a listing more than 30 minutes drive from my office.

Sometimes buyers would rather be represented by someone they know even if it's a little out of their usual area. As long as the agent is still working in the buyer's best interest, I think this is their choice. Though for myself, I rarely take a buyers that are not in my area.

Nicole....my team members rarely leave Franklin....I only market to the Franklin area.

Christine....yes, as Lenn stated yesterday, she always did her homework and was very familiar with the area and product before she traveled outside her main marketplace...too often, agents just drop in for one visit and use a variety of excuses, after the deal is together, not to show up again.

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Barbara Todaro "Franklin MA Homes"

Franklin, MA

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RE/MAX Executive Realty

Address: 445 Franklin Village Drive, Franklin, Ma, 02038

Office Phone: (508) 520-9881

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The Kuney-Todaro Team is the "#1 team in Franklin's #1 office." Our expertise is in marketing new construction and resale properties. New construction is our niche and we have sold 40 subdivisions in the area of Franklin MA.

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